We have found that under appropriate conditions human B-cells neoplasms can be induced to differentiate into immunoglobulin-secreting cells. Follicular (B-cell) lymphoma cells are often suppressed by nearby T cells, presumably as a host immune response. Induction is associated with a marked change in morphology characterized by both immunoblastic and plasmacytoid features. Abundant intracytoplasmic immunoglobulin accumulation occurs and cells secrete monoclonal immunoglobulin into the culture supernatants. A variety of cell surface markers have been analyzed and a loss of surface IgD is the only significant change seen during induction. The differentiation is regulated at least at a pretranslational level since there is significant and rapid accumulation of IgM mRNA. Like plasma cells, the activated cells selectively produce more secretory than membrane form of IgM mRNA by the developmentally regulated alternative processing of IgM mRNA. The mechanism by which differentiation is activated in these cells is mediated by a calcium-dependent pathway, TPA-activated protein-kinase-C.